On 25 August 2017, the SEC Division of Corporation Finance published an update to its Financial Reporting Manual.
The most significant updates include:
- a new section that precedes the table of contents has been added. This section describes how registrants may communicate with the Division's Office of the Chief Accountant ("CF-OCA") when requesting reporting relief under Rule 3-13 of Regulation S-X, answers to interpretative letter requests or informal advice, or assistance to identify and explain applicable SEC rules, regulations, forms and guidance that affect the form and content of financial statements or other financial information required to be included in SEC filings. In each case, the manual provides appropriate contact information;
- section 2065 has been amended to clarify that this section also applies if the business acquired is identified as a predecessor of the registrant. Registrants may thus directly request permission from the CF-OCA to provide abbreviated financial statements instead of full financial statements for an acquired business that represents a predecessor of the registrant;
- in addition, the Staff made corresponding changes in the manual in light of the Compliance and Disclosure Interpretations ("C&DIs") update of 17 August 2017 related to the circumstances under which certain financial information may be omitted from draft and filed registration statements. See "SEC Provides Additional Relief to Facilitate IPO Filings" above; and
- the updates in Section 10220.5 refer to FAST Act C&DI Question 2, which clarifies that an EGC may omit financial statements of other entities from its filing or submission if it reasonably believes that those financial statements will not be required at the time of the offering.
The updated Financial Reporting Manual is available at:
https://www.sec.gov/corpfin/cf-manual/index.html
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
